Lowest Income Households In Need Of Insurance
Over half of the lowest income households in the UK do not have any insurance at all reports the ABI (Association of British Insurers). This particular demographic is said to be the most vulnerable to fire, flooding, and crime.
ABIs new report 'Access for All: extending the reach of insurance' discovered that only 44 percent of people in low income homes (earning less than £10,000 per annum) buy contents insurance compared to 82 percent of average income households (earning between £15,000 and £30,000 per year).
Additionally, only one third have car insurance and even less are protected with life insurance. Low income people then become vulnerable to lost, stolen or damaged possessions due to insufficient protection. As a result, many turn to borrowing loans thus sinking deeper in debt.
According to the ABI, there is a direct connection between the poorest households and greater exposure to risks compared to their wealthier counterparts.
For example:
- Low income households earning less than £5000 were 71% more likely to be burgled at least once compared with average income households
- The poorest neighbourhoods experience up to 30 times more arson and,
- People in the lowest income communities are more vulnerable to flooding conditions
Director General of the ABI, Stephen Haddrill, spoke recently at a seminar on 'financial inclusion and insurance' and had this to say, "Insurance provides valuable protection to people on all income levels. The poor are least able to deal with financial loss and depend most on insurance.” Concerns about how few low-income households are protected, he continues, “A lack of spare cash is the biggest factor holding back the purchase of insurance by lower income households. “
Mr Haddrill gives hope to those who need insurance the most by stating, “In early 2008 we will launch a new campaign, with a special emphasis on insurance with rent schemes, improved financial education and easier access to insurance for customers with particular needs."
Published on October 12, 2007
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